OPEC+ and its allies meet next Sunday on June 4th, 2023, and expectations are pointing towards an additional decline in supplies to support oil prices, which fell earlier this month to their lowest levels since December 2021.
The organization already lowered production in October 2022, and again last April after supply reached 3.6 million barrels per day. Despite this, prices continued to decline, and Brent crude fell to around $70 a barrel, down from highs of $130 a year ago.
Figure 1 shows the important support level for oil around $70, with prices bouncing from this point on several occasions. This makes the upcoming meeting of OPEC+ of major importance. The organization is set out on keeping a balanced market between supply and demand, aiming to ensure that prices do not slip below those levels.
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Figure 1: Brent Crude, MetaTrader 5, CFI
Prices for the coming period are fixed between the positive technical factors displayed and the expected supply cuts from OPEC +, mixed in with fears of falling demand due to an expected economic slowdown and recession. While the market is considered balanced currently, at some point this parity will have to end, leading oil to take a new price direction.
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